Apple executive Eddy Cue rocked Alphabet shares earlier this week when, testifying during the U.S. antitrust case against Alphabet, he said that the volume of Google searches on Apple’s Safari web browser had declined for the first time in more than two decades. Cue attributed that declining volume to people using new AI-driven tools to find information.
The bombshell comments drove Alphabet’s stock price down as much as 9% in intraday trading, although they have subsequently clawed back some of those losses and are currently about 6% lower than before Cue’s testimony.
Investors have been worried that AI chatbots will eventually displace Google Search, which accounts for 55% of Alphabet’s overall revenues, and is believed to also account for a much larger percent of the company’s profits. (We don’t know exactly how much, because Alphabet does not break out its profits by the same segments for which it reports revenue.) But trying to tease out exactly how AI competition is impacting Google, and which rivals might be gaining at Google’s expense, is tricky.
